Employee Spotlight August Posted on: August 25, 2017

For this month’s Employee Spotlight, we will be talking to some of the members of the Client Services Team here at Future Assist.

NELSON LOYOLA SILVA

What is your position at Future Assist?

I am currently the Head of Client Services.

How long have you worked at Future Assist?

I have been working here for around 7 years.

What is your favourite part of the job?

Every day I get to work with clients and help them to achieve their financial goals. It’s great seeing the progress that they make.

If you could describe working at Future Assist in three words, what would they be?

Fast, evolving and motivational.

HAYLEY TALMASH

What is your position at Future Assist?

I am here as a Client Services Manager.

How did you come to Future Assist?

I am currently studying to complete my Bachelor of Business (Finance), and I chose to work for Future Assist during my study.

How would you describe the work that you do here?

Most of my work here involves helping everyday people achieve their financial goals and realise their retirement dreams.

What do you like to do outside of work?

I love being outdoors and taking walks along the beaches here on the Gold Coast. I’m passionate about exercise and in particular CrossFit.

SUMIRE GOTO

What is your position at Future Assist?

I am currently working as a Client Services Manager.

How did you come to Future Assist?

Before Future Assist I was working in accounting. I have always been passionate about finance, so I jumped at the opportunity to join the team at Future Assist.

What is your favourite part of the job?

I love being able to help clients reach their financial goals and it is always rewarding when they do.

How would you describe work at Future Assist in three words?

Challenging, supportive and rewarding.

How to Choose the Right Bank For You Posted on:

​Banks are a necessary evil. They continually refuse to pass on the Reserve Bank’s interest rates cuts, they charge for everything, they offer very low interest on savings and for most of us it feels like they run the world.

The Commonwealth Bank recently announced a full-year after-tax profit of $9.93 billion, a 7.6 per cent rise. While this was great news for CBA shareholders the downside was the rise in profit comes as Australia's biggest bank faces allegations its intelligent deposit machines were used by money launderers and criminal gangs.

It appears that no matter how much profits are made by the big banks, there is an insatiable appetite for more. For the customer, extra profits haven't translated into extra service or better deals. Given this maybe its time for us all to take a serious look at what our banks are offering and explore our options.

Understanding the different types of banks.

Thankfully, when it comes to banking, you are given a choice as to which institution you find would be more suitable for securely holding your money. Remember, there isn’t one bank that suits the needs of everyone, so keep in mind your financial wants and needs when thinking about which bank would suit you better.

BIG BANKS

Big banks are… well, big. They have huge client bases and spend a lot of time advertising their services, so you’ve probably heard of one before. That being said, bigger doesn’t always mean better.

In Australia, we have the big four banks, NAB, Commonwealth Bank, ANZ and Westpac. Due to their size, you’ll no doubt find it relatively easy to locate an ATM or speak to a teller at one of their many branches, and you’ll often find that their systems are easy to navigate and up to date.

That being said, big banks probably won’t be able to provide you with the best deals. Because they work with so many clients, they don’t have any incentive to provide the best deals and many of their services, such as cheque and savings accounts, come with extra fees. They also rarely personalise their services to cater to your needs, so expect customer service to be difficult.

LOCAL BANKS

If big banks aren’t your cup of tea, you could settle for something smaller and more intimate such as a local bank. Local banks are all about their local community and they can offer a variety of unique services because of this.

In comparison to other types of banks, local banks usually have reasonable fees and rates, and since they focus on the community surrounding them, you will most likely find it easier to form a close relationship with them.

Local banks aren’t without their flaws, however. Because of their focus on community, you will find it difficult to locate branches and ATMs outside of their intended area, and any services they offer online or through technology may not be as up-to-date as those found in other types of bank.

ONLINE BANKS

With the internet becoming such an integral part of our daily life, it’s understandable that newer banks have risen as a result. Online banks provide all of the services electronically, and they truly represent banking of the future.

Online banks are, as the name suggests, based through the internet; therefore they don’t have to deal with the costs involved in maintaining physical branches and ATMs. This means their services are incredibly cheap compared to other types of banking. Their dependence on the internet has also improved the overall quality of their systems; therefore you should find them easy to use.

Of course, being completely online has also resulted in a couple of downfalls for online banks. Since they don’t have ATMs, you’ll most likely have to withdraw cash from other bank’s ATMs; therefore there could be extra fees involved. Also, because they lack physical branch locations, you’ll most likely have to speak with a teller over the phone when you need to.

CREDIT UNIONS

A surprising amount of people don’t quite understand what credit unions are, but they could turn out to be a suitable solution for your banking needs. The exclusivity results in many benefits, depending on who you are.

Credit unions are designed to appeal and work for a certain group of people, usually focusing on people within a certain profession such as teaching. Therefore a credit union focused on your particular profession can offer you personalised services including better interest rates and lower fees. Their not-for-profit structure and their inclusion of members when it comes to managerial decisions make credit unions an attractive option.

This may all sound great, but credit unions, like other types of banks, have their flaws. For example, they are rather exclusive and can only be used by a particular group of people, so you’ll need to have the right qualifications to become a member. Because of their exclusivity, they also usually only have a few branches and ATMs.

Some questions to consider 

  • What service will I get? Is the bank easy to contact, will they provide me with regular reviews or actively offer me better products or deals?
  • ​Do the products and services that the bank offers fit into my financial strategy?
  • What are the fees? Are they easy to understand or are they buried in terms and conditions?
  • What balance is required to avoid fees?
  • What does it cost to transfer money?
  • Can I use an ATM or EFTPOS for free?
  • What are the fees for accessing out-of-network ATMs
  • How soon are deposit funds available?
  • What is the comparative interest rate?
  • What discounts can I get if I bundle my accounts and loans?
  • Is online banking offered and if so what security measures are in place? What additional services are offered?
  • What are the online reviews saying about this bank?​

SUMMARY

Your loyalty should be earned and never taken for granted. Banks rely on the fact that many people find it too hard (or are too busy) to ever consider changing.  The truth is, a little effort can offer tangible rewards and even save you some money.

While there certainly are many different types of banks available to you, no one bank can offer everything. Each bank will offer its own variation of products and services in an attempt to communicate a unique offering. For example, some banks charge users for opening an account, while other  banks may specialise in solutions for a specific industry such as police officers or teachers.  

While convenience, interest rates and fees are important factors, proctive customer service and the correct structuring of financial products are often overlooked when considering a swap.  Keep in mind it's your hard earned money. You deserve to be treated as a valued client during the entirety of your relationship with your bank and not just at the beginning or when the banks retention team calls you in an attempt to prevent you from leaving

Its easy to see how complexity and lack of inertia are the friend of the bank and the enemy of the consumer. As such, it can be benifical to get professional advice from a source outside of the banks themselves.  If you have a financial plan, understading the requirements your financial strategy and then asking the right questions can put you in a great position to make an informed decision.  From here you can assess whether to switch banks or if its worth staying to negotiating a better deal.

Nelson Alexis Loyola Silva

National Head of Client Services

1300 118 618

Bitcoin surged new high adding $17 billion just over a week Posted on: August 18, 2017

Summary:

This year has seen some ridiculous growth from the virtual currency Bitcoin. Recently, Bitcoin’s price surged up to $4500 for the first time, and now Bitcoin has a market value of $73.6 billion.In the past nine days, the virtual currency has risen by around $1000, and the total market value jumped $17 million.

It’s possible that this growth is related to the increase in interest from Japanese and Korean exchanges. For some, this sudden rise creates a lot of concern. Many believe that the virtual currency will hit a peak of around $4,827, prompting its decline.

In a Nutshell:

  • The virtual currency, Bitcoin, has grown in value very sharply and is now worth around $4500 with the total market value at $73.6 billion.
  • In the past nine days, the currency has risen in value by $1000, and the total market value has risen by an astonishing $17 million.
  • The growth has been partially credited to the increase in interest from Japanese and Korean exchanges.

Read On: Bitcoin surged new high adding $17 billion in just over a week, by Lucinda Shen:

Defying naysayers, Bitcoin's price surged above $4,500 for the first time early Thursday to reach a market value of $73.6 billion.

While the cryptocurrency has since pared some of its gains, falling to $4,453 by midday Thursday, it's risen by about $1,000 in the past nine days. The currency's total market value jumped $17 billion in the same period, thanks in part to the optimism traders have around plans to help Bitcoin eventually go mainstream. This includes speedier transactions, starting with its software update—dubbed Segwit2x—earlier this month.

“We can also speculate that it is related to the increased interest from Korean and Japanese exchanges where volumes are also increasing,” William Mougayar, the founder of Startup Management, told Fortune. “Another part of it is driven by the psychology of markets, as $USD 5,000 seems to be within reach, now that the $4,000 level has been easily broken.”

That said, Bitcoin's sudden rise is cause for concern for some.

Goldman Sachs analyst Sheba Jafari wrote in a Sunday note that she expected Bitcoin to potentially hit and peak at $4,827.

"The market should in theory enter a corrective phase. This can last at least one third of the time it took to complete the preceding advance and retrace at least 38.2% of the entire move," she wrote. "From current levels, that would measure out to around $2,221."

Meanwhile, plans to scale up Bitcoin haven't exactly gone smoothly. Miners still appear split about how to implement SegWit2x. The first part of that plan was activated earlier this month, but the second part, an upgrade to Bitcoin's software by increasing block size to two megabytes in November, has been a point of contention. That upgrade, which was made official this week, will result in a "hard fork."

Miners already dissatisfied with Segwit2x decided not to make that upgrade earlier this year, forming a new cryptocurrency offshoot dubbed Bitcoin Cash. If more miners shun the November upgrade, it would in theory result in yet another Bitcoin currency.

Bitcoin Cash is trading at about $373.80, 47% off its all-time high earlier this month. Ethereum, on the other hand, is trading at about $289, 26% off its all-time high earlier this year.

Credits:

Lucinda Shen

Journalist at Fortune

www.fortune.com

Questions about money all under 30’s should be thinking about Posted on:

Summary:

When it comes to your finances, if you’re under 30 there are many different things to consider. It may seem overwhelming at first, but by splitting it up into simple questions, you can work towards forming a suitable plan for your financial future.

Since many people under 30 have studied or are planning on studying, it’s important to think about how you will be paying your HECS-HELP loan off. So it’s important to ask whether or not you will be paying it off or saving instead.

Whether or not to purchase private health insurance is also an important question to ask yourself. Many under 30-year-olds believe that paying for health insurance at such a young age is pointless, but it could end up saving you money in the future.

Do you know the tax implications that come with having more than one job? Many young people tend to hold more than one job before they end up in a full-time job, but many different implications come with holding two jobs.

These are just a few of the questions you should ask yourself about money if you’re under 30 years old.

In a Nutshell:

  • If you’re under 30, there are many different questions you can ask yourself about regarding money. By answering these questions, you can make it easier to plan your financial future.
  • Many of those under 30 may find life too stressful to consider their financial future, especially when it comes to retirement. Answering simple questions can help to reduce the stresses involved.

Read On: Money questions you should be asking if you're under 30, by Effie Zahos:

DO I PAY OFF MY HECS-HELP LOAN OR SAVE?

With an interest rate equal to the inflation rate, this is one of the cheapest debts around. So if you have any other debts, pay them off first. If not, then you’d be better off saving, provided your net return (including tax on interest earned) is greater than the rate of inflation.

You don’t have to start paying off your HECS -HELP debt until your income is above $54,869, the compulsory repayment threshold for 2016-17. The amount you repay each year is a percentage of your income. The percentage increases as your income increases, so the more you earn, the higher your repayment will be.

The ATO will calculate your compulsory repayment for the year and include it on your notice of assessment. So, for example, if you earn $55,000 your repayment rate is 4% ($2200). You can make voluntary repayments to the ATO at any time and for any amount.

To get an estimate of your compulsory HELP repayment visit calculators.ato.gov.au.

SHOULD I GET PRIVATE HEALTH INSURANCE?

This is a no-brainer. Besides allowing you to afford expensive medical services when you need them, if you earn over $90,000 or you’re over 30 it pays to have, at the very least, basic hospital cover.

Not only will you save on tax (Medicare levy surcharge) but you’ll end up saving on premiums too (life-time health cover loading).

If you don’t take out hospital cover before the July 1 following your 31st birthday, a 2% loading on top of your premium will apply each year for every year you are aged over 30 and you don’t have private hospital cover.

For example, if you take it out when you are 40 you will pay 20% more than someone who first took out hospital cover when they were 30. The maximum loading is 70%.

The ATO also charges an extra 1% in tax if you earn over $90,000 and don’t have hospital cover. Why pay the tax man extra when you can use this cash to cover yourself.

WHAT ARE THE TAX IMPLICATIONS OF HAVING MORE THAN ONE JOB?

If you are an Australian resident for taxation purposes, the first $18,200 of your yearly income is not taxed.

This is called the tax-free threshold. If you have more than one paying job at the same time, the ATO requires that you only claim the tax-free threshold from the employer who usually pays the highest salary or wage.

Your second employer is required to withhold tax at the higher, “no tax-free threshold” rate. If your second payer does not withhold a higher rate of tax, this may lead to a tax debt at the end of the financial year.

However, if you are certain your total income for the year will be less than $18,200 you can claim the tax-free threshold from each payer.

More details can be found at ato.gov.au.

AM I ENTITLED TO SUPER?

There is no shortage of employers who try to avoid paying super.

They might decide not to pay you because you work on a casual or part-time basis, or because they prefer to represent you as a contractor, not an employee. Having an employment contract does not mean you are a contractor.

Broadly, if the employer has control over the work you do and the way you do it, pays you for the time you have worked, provides most of the equipment and takes all the commercial risks for the business, you are an employee, not a contractor.

If you are employed either full time, part time or casually, aged 18 or over and earn over $450 a month (before tax), your employer is required to make regular superannuation contributions on your behalf, currently 9.5% of your salary.

This is called the super guarantee (SG) and forms part of your wages. Employees and some contractors are eligible for SG contributions but they do not apply to those who are self-employed.

Whether or not you are entitled to compulsory employer contributions will depend on your work arrangements.

The tax office’s employee-contractor tool can help you determine whether or not you are a contractor. The site also provides the documentation you need to lodge a complaint.

SHOULD I SALARY SACRIFICE?

According to Paul Clitheroe, Money’s chief commentator and a financial adviser, super has all the key elements for wealth creation.

It allows you to put in money on a regular basis (tick here for dollar cost averaging), is a long-term investment (so interest is paid on interest) and is taxed at just 15%.

Yes, your money will be locked away until you retire but contributing just an extra $10 a week from age 24, and assuming growth of 5% a year, you’ll enjoy an extra $70,000 in your super when you retire.

Just ask your employer if you can have money paid into your super fund from your salary before income tax is taken out. These contributions can reduce your tax bill as well as boost your super.

If you earn $37,000 or less a year, you may be eligible to receive a low income super contribution (LISC) of up to $500 to help save for retirement.

HOW HARD IS IT TO GET A LOAN IF I’M SELF-EMPLOYED?

It may actually be harder to get a credit card than a home loan. That’s because lenders have specific home loans for self-employed people, contractors and business owners.

They’re called loc doc loans.

Having said that, you still need to prove your income, show a serviceability history of six months (prove that you can meet your expenses and there is a surplus), show a savings history and have a good credit history.

Unfortunately, you will have to jump through more hoops than if you were an employee.

Credits:

Effie Zahos

Finance Journalist at Money Mag

www.moneymag.com.au

Women are retiring with half as much super as men Posted on: August 14, 2017

Summary:

A recent study into the differences between superannuation for males and females found that a woman’s median superannuation total by retirement was about $80,000. Therefore, the median superannuation for a woman is merely 47 per cent of the superannuation for a man at the same age.

The study indicated that at age 25, women and men had similar superannuation balances, but as soon as they reached 35, the gap would be around 30 per cent. From 35 onwards, the gap separating superannuation for men and women only widens. It is thought that this gap originates from the treatment of women at the time super was designed and introduced.

The research done indicates that there need to be significant changes to the current system to account for the inequalities. Example changes include tracking super balances to identify problems and intervene where necessary, with pathways offered to those falling behind.

In a Nutshell:

  • A recent study indicated that at retirement, women have a mean superannuation balance of $80,000 which is 47% of the mean balance for men.
  • While young women have similar super balances to men, as age increases the gap between the two also increases exponentially.
  • The research indicates that changes need to be made to the superannuation system to help those who are falling behind when it comes to accumulating super.

Read On: Women on track to retire with half as much super as men, by Antoinette Lattouf:

Australian women retire with less than half the amount of superannuation than men, and the system was designed to benefit working fathers when it launched 25 years ago, according to a major study.

The study entitled Not So Super, For Women, revealed a woman's median superannuation total by retirement was $80,000 - just 47 per cent of what a man the same age accumulated over the same period.

Author David Hetherington, from think-tank Per Capita, said on average, women retire with less than three years of modest retirement living.

"Mothers in particular are penalised compared to women without children and even men without children, and it's fathers who are positively rewarded by the income and super system," he said.

At age 25, women have similar superannuation balances to men, but by the time they reach 35 their balances are 30 per cent lower and the gap continues to widen from there.

"Super was designed in the '80s and '90s for a different model of work and a different model of social structure," said Mr Hetherington.

"The man went to work 40-plus hours a week. It was assumed that women would have a man at home that would do the earning."

He said it systematically disadvantaged women, who were increasingly employed in low-paid, part-time positions.

WOMEN FACING HOMELESSNESS AND FORCED TO SKIP MEALS

Lisa Smajlov is a 47-year-old single mother who does not own her own home.

Statistically she is among the nation's most vulnerable when it comes to retirement.

"I was in a domestic violence relationship and when I left my ex, my son was six months old and I couldn't work in the corporate sector," Ms Smajlov said.

The former human resources worker now works in social services and took a part-time role at half her previous salary.

"I'm not doing salary sacrifice at the moment like I did when I was in the corporate sector, when I had a very good salary," she said.

"It makes me feel very vulnerable.”

"I don't feel like I'm going to be impacted by not having anywhere to live at the moment but that could be something that could happen down the [line]."

Mr Hetherington said many of the survey responses from women echoed Ms Smaljov's concerns.

"Some of the stories are really visceral and there are plenty … that are disturbing," he said.

"[Like] people having to make a choice whether they keep hot water on in winter or whether they can still have a pet or have food for themselves.

"Some people are contemplating homelessness and basically people are very anxious."

SUPERANNUATION 'NEEDS MAJOR OVERHAUL'

The research recommended a range of policy changes, which included tracking super balances to identify where intervention was necessary, with 'accumulation pathways' offered to those falling behind.

"A top-up from government for people whose balances have fallen too far below the pathway towards a decent retirement income is another, so that government will be putting in another 2.5 per cent for them," Mr Hetherington said.

"Government should pay super contributions on its current paid parental leave scheme and we think enterprise agreements with employers and unions should be made to paid parental leave schemes."

The study polled 4,000 union members and used data from the Australian Bureau of Statistics Household, Income and Labour Dynamics survey to monitor how superannuation balances were changing over time.

It is a joint initiative by think tank Per Capita and The Australian Services Union.

The ABC sought comment from the Business Council of Australia and The Australian Federation of Employers & Industries without success.

Credits:

Antoinette Lattouf

Cross Platform Journalist at ABC News

www.abc.net.au

RBA Board Meeting Decision August Posted on: August 1, 2017

Summary:

At this meeting for August, the board decided to leave the cash rate unchanged, and so it will remain at 1.50 percent.

Conditions in the global economy are certainly improving, as per the current trend. Above-trend growth is expected in many advanced economies around the world, but due to uncertainties, anything could happen. The Chinese economy is growing steadily, and commodity prices have been rising, although the terms of trade in Australia are expected to decline soon.

Forecasts for the Australian economy remain the same. The general forecast is that the economy will grow at an annual rate of around 3 per cent for the next couple of years. The transition of investment following the mining investment boom is almost complete, which is helpful given improving business conditions.

Employment growth has been strong over the last months in all states, with the unemployment rate expected to decline over the next couple of years. Despite this, wage growth is still weak and is likely to remain that way for a while.

Following these factors, the RBA board has decided that the best course of action is to keep the cash rate unchanged.

In a Nutshell:

  • Global economic conditions are improving, but there are still uncertainties remaining. The Chinese economy is growing and commodity prices are on the rise.
  • The Australian economy is expected to grow at an annual rate of around 3 per cent for the next few years. Transition from mining investment to business investment is almost finished.
  • Employment growth has been strong, with unemployment expected to decline over the next couple of years. Wage growth remains low and will likely remain that way for a while.

Read On: Statement by Philip Lowe, Governor: Monetary Policy Decision:

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

Conditions in the global economy are continuing to improve. Labour markets have tightened further and above-trend growth is expected in a number of advanced economies, although uncertainties remain. Growth in the Chinese economy has picked up a little and is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. Commodity prices have generally risen recently, although Australia's terms of trade are still expected to decline over the period ahead.

Wage growth remains subdued in most countries, as does core inflation. Headline inflation rates have declined recently, largely reflecting the earlier decline in oil prices. In the United States, the Federal Reserve expects to increase interest rates further and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and volatility remains low.

The Bank's forecasts for the Australian economy are largely unchanged. Over the next couple of years, the central forecast is for the economy to grow at an annual rate of around 3 per cent. The transition to lower levels of mining investment following the mining investment boom is almost complete, with some large LNG projects now close to completion. Business conditions have improved and capacity utilisation has increased. Some pick-up in non-mining business investment is expected. The current high level of residential construction is forecast to be maintained for some time, before gradually easing. One source of uncertainty for the domestic economy is the outlook for consumption. Retail sales have picked up recently, but slow growth in real wages and high levels of household debt are likely to constrain growth in spending.

Employment growth has been stronger over recent months, and has increased in all states. The various forward-looking indicators point to continued growth in employment over the period ahead. The unemployment rate is expected to decline a little over the next couple of years. Against this, however, wage growth remains low and this is likely to continue for a while yet.

The recent inflation data were broadly as the Bank expected. Both CPI inflation and measures of underlying inflation are running at a little under 2 per cent. Inflation is expected to pick up gradually as the economy strengthens. Higher prices for electricity and tobacco are expected to boost CPI inflation. A factor working in the other direction is increased competition from new entrants in the retail industry.

The Australian dollar has appreciated recently, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to subdued price pressures in the economy. It is also weighing on the outlook for output and employment. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.

Conditions in the housing market vary considerably around the country. Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities. Investors in residential property are facing higher interest rates. There has also been some tightening of credit conditions following recent supervisory measures to address the risks associated with high and rising levels of household indebtedness. Growth in housing debt has been outpacing the slow growth in household incomes.

The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

Credits:

Philip Lowe

Governor of the Reserve Bank of Australia

www.rba.gov.au

How to spot the new wave of tax scammers Posted on: July 19, 2017

Summary:

Though scammers have been performing illegal activities under the guise of official ATO staff for some time, with technology advancing they have become more active and more efficient. Within the first six months of 2017, 29000 ATO impersonation scams have been reported. Scammers appear to become more active around the end of the financial year due to the fact that many people are hoping to lodge a tax return.

If you receive a message stating that you have a refund available, but you are required to update your personal information or pay a certain amount of money, it is more than likely a scam. If you want to find out whether you have any legitimate refunds to collect, you should check your myGov account for any messages or call the ATO directly.

The ATO will never ask for your tax file number or bank account details via SMS or email, and these platforms are primarily used by scammers to obtain said information. It is also important that you keep your antivirus software up-to-date and always be suspicious when receiving a message which appears to be legitimate.

In a Nutshell:

  • Scammers are becoming more proficient, and there have already been multiple ATO impersonation scams reported.
  • If you receive a message mentioning an available tax refund, but it says you are required to pay a fee or update your personal information, it is probably a scam.
  • It is important to remember that the ATO will never ask for your tax file number or bank account details via SMS or email.

Read On: Tax scammers are getting smarter: here's how to spot them, by Anthony Keane:

SCAMMERS are stepping up their attacks on taxpayers by pretending to be Australian Taxation Office staff, but security specialists say you can still spot their sophisticated tricks.

The Australian Taxation Office says that in the first six months of this year it received reports of almost 29,000 ATO impersonation scams.

Scammers will often demand payments for false debts, or offer false refunds if you give them your personal details, and their activity is expected to intensify in the next few weeks.

An ATO spokeswoman said scammers were active around tax time because many people were thinking about lodging their return and receiving a refund.

“If you receive communications from the ATO to say you have a refund available, but that you need to update your personal information or pay money before receiving the refund, then it is more than likely a scam,” she said.

People could check if they had a legitimate refund by contacting their tax agent, checking their myGov account for any messages, or calling the ATO directly to verify the correspondence on 1800 008 540.

Sophos cybersecurity specialist David Sykes said people should never clink links from unknown sources.

Telephone scammers are using official ATO numbers and projecting them onto their caller IDs to trick people. “This impersonation method is called spoofing and is used in an effort to legitimise their scam call. While we do make thousands of outbound calls to the community every day, our calls do not project numbers on caller ID,” the ATO spokeswoman said.

Sophos cybersecurity specialist David Sykes said people should always think about scams whenever they received an unsolicited call or email.

“Assume it’s a fake until they prove otherwise. It’s a bit sad, but unfortunately it’s the best defence,” he said.

Mr Sykes said the ATO would never ask for your tax file number or bank details via SMS or email, and people should beware of fake myGov notifications when online.

“If you are unsure about the legitimacy of a myGov notification you have received, go directly to the myGov homepage and check your inbox for messages. If the notification in question is not there, contact the ATO immediately,” he said.

Computers antivirus software should be up to date and people should never click on links or attachments from unknown sources, Mr Sykes said.

“Be suspicious straight away. Stop for a moment before you click.

“If it asks for anything personal — such as your date of birth — warning bells should be screaming in your ears. You should be closing down the page and ringing the organisation.

“Report a rort. By reporting suspicious tax time activity, you’ll not only help yourself but help other Australians from falling victim to malicious attacks. Phone the ATO on 1800 008 540.”

PROTECT YOURSELF AT TAX TIME

• Have strong, secure passwords

• Ensure your devices have the latest security updates

• Use spam filters on email accounts

• Secure your wireless network

• Be careful what you share on social media

• Treat your personal information like cash

• Monitor your bank accounts

• Keep your mail secure

• Don’t download attachments from strangers

• Take the ATO’s online security questionnaire (LIN)

Credits:

Anthony Keane

Personal Finance Writer at News Corp

www.dailytelegraph.com.au

RBA Board Meeting Decision July Posted on: July 14, 2017

Summary:

The RBA has decided to leave the cash rate unchanged at 1.50 percent. The decision to leave the cash rate unchanged stems from the fact that there are still some uncertainties in the global economy, however, it is expected that there will be above trend growth in some advanced economies around the world.

The Australian economy is expected to strengthen overtime, albeit slowly, with the transition from mining investment to alternative investment almost complete. Business investment has increased, and business conditions have improved. Consumption growth remains low coinciding with the slow growth in real wages and the high amount of household debt.

Conditions in the housing market vary considerably around the country with housing prices increasing substantially in some areas and slowly in others. In some markets, housing prices are declining. Substantial growth in housing debt has created much risk which needs to be considered when deciding the cash rate.

In a Nutshell:

  • The RBA will be leaving the cash rate unchanged at 1.50 percent due to there being some uncertainties in the global market and steady growth.
  • The Australian economy will most likely strengthen slowly over time, and business investment has increased following the decline of mining investment.
  • Conditions in the housing market vary considerably around the country, with some areas having a substantial increase in prices while others are witnessing decreases in prices.

Read On: Statement by Philip Lowe, Governor: Monetary Policy Decision:

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The broad-based pick-up in the global economy is continuing. Labour markets have tightened further in many countries and forecasts for global growth have been revised up since last year. Above-trend growth is expected in a number of advanced economies, although uncertainties remain. In China, growth is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. The rise in commodity prices over the past year has boosted Australia's national income.

Headline inflation rates, having moved higher over the past year, have declined recently in response to lower oil prices. Wage growth remains subdued in most countries, as does core inflation. Further increases in US interest rates are expected and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and volatility has been low.

As expected, GDP growth slowed in the March quarter, partly reflecting temporary factors. The Australian economy is expected to strengthen gradually, with the transition to lower levels of mining investment following the mining investment boom almost complete. Business conditions have improved and capacity utilisation has increased. Business investment has picked up in those parts of the country not directly affected by the decline in mining investment. At the same time, consumption growth remains subdued, reflecting slow growth in real wages and high levels of household debt.

Indicators of the labour market remain mixed. Employment growth has been stronger over recent months. The various forward-looking indicators point to continued growth in employment over the period ahead. Wage growth remains low, however, and this is likely to continue for a while yet. Inflation is expected to increase gradually as the economy strengthens.

The outlook continues to be supported by the low level of interest rates. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.

Conditions in the housing market vary considerably around the country. Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades. Growth in housing debt has outpaced the slow growth in household incomes. The recent supervisory measures should help address the risks associated with high and rising levels of household indebtedness. Lenders have also announced increases in mortgage rates for investor and interest-only loans.

Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

Credits:

Philip Lowe

Governor at the RBA

www.rba.gov.au​

Invisible Money and Your Budget Posted on: July 13, 2017

Summary:

Most of our purchases are made through authorization at that exact moment, however, with the increase in subscription services requiring recurring direct, people are beginning to lose track of their spending.

With no passing of cash or card, people are finding it harder to follow the money coming out of their bank accounts. Services such as Netflix and Spotify are examples of the use of a recurring direct debit payment, where the customer has the funds automatically transferred every month or so.

While technology has created this problem, it can also be used to save ourselves from losing track of our own money. Bank apps allow you to check your recent transactions immediately and track spending and there are also apps that can automatically track your spending and give an overview.

In a Nutshell:

  • With new technology, subscription services are now able to be paid in recurring direct debits without action made by the customer.​
  • Services such as Netflix and Spotify, with their direct debit system, are making it harder for young people to track their spending.
  • Though technology appears to be the source of this issue, it can also be used to make trackign direct debits easier and thus allow us to effectively budget with the new technology.

Read On: How 'invisible money' could be killing your budget, by MoneyTeam:

Netflix charges, online shopping and recurring direct debits are draining the bank accounts of young Aussies, who are losing the battle against “invisible money”.

“Invisible money powers the sharing economy – it’s the money that third-party providers extract from our phone apps when we order our food, wine and taxis through smartphones,” says Keith Brown, general manager of product, scheme and business services at BPAY.

Hooking up credit cards and direct debits to apps is making it harder for young people to keep on top of their finances, he says.

“Because no physical money or cards actually change hands, paying for something instantly through an app is an incredibly easy way to lose track of your finances.”

This, coupled with the sharing economy and the outsourcing of work, means “we are witnessing a new frontier in how young Australians relate to money and bills”.

Brown says the same technology that has contributed to the problem can help resolve it:

  • Use your smartphone folders, segment the apps that are hooked to your credit card and understand the impact of each through assessing its necessity.
  • Get a system that enables you to view all of your bills in one place, such as your bank app. This holistic view will make bill paying an easier task.
  • Concentrate on understanding the tangibility of each transaction. Paying for items through apps make it seem as if no money is actually changing hands – this mindset will quickly get young people into debt.
  • Adopt debit cards, or make payments from transaction accounts instead of credit cards, to combat the temptation to spend money you don’t have.

Millennials are the demographic most likely to make regrettable financial decisions, according to recent research from SocietyOne.

More than 60% of millennial credit card holders have mismanaged their money, and 48% don’t pay off their balance every month.

Research from BPAY Group shows millennials are the cohort most likely to experience financial stress, with four out of five saying they often get caught out by unexpected bills or recurring payments. This is more than triple the amount of any other age group.

“Invisible money isn’t going anywhere any time soon,” says Brown, “and it’s up to banks and credit unions to educate their younger customers on how to manage their money and debts with their apps.”

Credits:

MoneyTeam

Money Mag

www.moneymag.com.au

ATO cracking down on small business and individual tax deductions Posted on: July 6, 2017

Summary:

‘The tax gap’ has grown larger than expected, and the ATO is now targeting small business and individuals who they think are making excessive and illegitimate tax deductions.

The Taxation Commissioner, Chris Jordan, stated in a speech to the National Press Club in Canberra that the ATO would step up its game in the fight against unnecessary claims. They found that, while many people believed bug businesses to be at the root of the problem, small businesses proved to be the most damaging regarding the size of the ‘tax gap’.

While many claims were legitimate to some extent, it was found that they were excessive in their nature and that too much was going towards unnecessarily large tax deductions.

The commissioner stated that the effort to reduce illegitimate claims in large businesses would not stop; however, more effort will be put towards spotting questionable tax deductions in small businesses. In particular, 'Cash only’ shops will be targeted, with more visits by the ATO’s ‘Black Economy Taskforce’.

In a Nutshell:

  • The ATO will now be focusing more on illegitimate and questionable tax deductions arising from small businesses and individuals.
  • The amount lost to excessive claims made by small businesses and individuals exceeded the amount lost illegitimate claims made by big businesses.
  • Alongside the increased surveillance of small business activity, the ATO will also be targeting 'cash only' businesses more often with their 'Black Economy Taskforce'.

Read On: ATO Tax deduction warning for small business and individuals, by David Chau:

Too many individuals and small businesses are making excessive tax deductions and the Tax Office is threatening to come after them.

The ATO particularly wants to target taxpayers with attitudes like: "Everyone cheats a bit, so I can too"; "others won't care if I cheat"; and, "I claim deductions (legit or not) to make sure I get a refund".

That was the message conveyed by Taxation Commissioner Chris Jordan in his speech to the National Press Club in Canberra.

He is determined to minimise "the tax gap" as much as possible.

The tax gap is an estimate of the difference between how much tax the ATO collects, and what it would have collected if every taxpayer paid all their taxes in compliance with the law.

While many people say big businesses do not pay their fair share of taxes, the Commissioner's view is that there are significant gaps in policing the smaller players.

"There are likely to be bigger gaps in each of those markets [individuals and small businesses] than in the large market," he told the gathered reporters.

"The results of our random audits and risk based audits are showing many errors and over-claiming for work-related expenses."

He explained the overclaiming can be due to legitimate mistakes, carelessness, recklessness and fraud.

"In 2014-15, more than $22 billion was claimed for work related expenses," he said.

"While each of the individual amounts over-claimed is relatively small, the sum and overall revenue impact for the population involved could be significant.

"In the vicinity of, or even higher than, the large market tax gap of $2.5 billion – and that's just for this category of deductions, work-related expenses".

TAXMAN LOOKING INTO PEOPLE'S DIRTY LAUNDRY

Following his speech, Mr Jordan answered questions about common types of overclaiming tax deductions - for example, property rentals.

"There is about $40 billion of rental income, and $44 billion of rental deductions," he observed.

The problem with rental deductions exceeding incomes is that "it results in about $3.6 billion net rental loss".

The bulk of those deductions would be mortgage interest repayments and depreciation allowances, although in its most recent budget the Federal Government moved to crackdown on some commonly exploited areas of depreciation as well as landlord travel deductions.

Mr Jordan also explained that too many people illegitimately claim laundry expenses.

"There are a lot of people - 6.3 million - who claim laundry expenses," he noted.

"You don't have to substantiate $150 worth of laundry. Lots of people claim that, you might say, 'So what?'

"It actually adds up to more than that large company."

The point he made was "the individuals market [has] a fairly significant potential gap that swamps the large market - individually small, but collectively large."

"Cash only" shops will also be targeted by the ATO's "Black Economy Taskforce", which will increase visits to locations which have a high proportion of such businesses.

But the commissioner stressed he has not relaxed his scrutiny on big businesses.

"We have to make sure we aren't just focused on one sector, the large corporates, we are not giving that up," Mr Jordan said.

"We feel like we have done a lot of work in the last three years in that space.

"We have the laws, the funding, the talent and the team is in place, but we need to recalibrate into these other areas of the cash economy and individuals overclaiming work-related expenses."

Credits:

David Chau

Business Reporter at ABC News

www.abc.net.au

First Census Results Are Out Posted on: June 28, 2017

While the initial data collection for the census in 2016 may have turned out to be a complete failure at first, Australians finally get to see the results after so many technical issues. The Census is the largest form of information gathering conducted in Australia – it tells us about our way of life and helps us plan for the future.

It’s important to remember that data interpretation is still under way and many results are not yet visible to Australians. Most of these results will be published shortly, so you will have to wait a while before you can access information about certain statistics.

Employment

Most of the information regarding employment in Australia will not be accessible until October this year. Despite this, there are still some interesting statistics available.

The median personal income for Australians over the age of 15 is 662$ per week. For families, this income rises to about $1734 per week. Therefore, single Australians are earning about $34,424 per annum while families are earning approximately $90,168.

The majority of Australians, 69% to be exact, participated in unpaid domestic work within the last week of the census, and 27.6% cared for a child or children two weeks before the census. 48.6% of Australians participate in at least 1-14 hours of unpaid domestic work per week.

Family

Like employment statistics, most of the information about families in Australia will be released in October this year, and only composition data is currently available.

In Australia, most families are couples with or without children, comprising 82.5% of all families. 15.8% of households are led by single parents, of which 81.8% are female, and 18.2% are male.

Housing

For Australians today, there is somewhat of a ‘supposed’ housing crisis; therefore it’s important to look at the census statistics relating to housing to gain a better understanding of what is happening.

88.8% of all privately owned residential property is currently occupied, while 11.2% is unoccupied. 72.9% of occupied private property are separate houses, while 25.8% are semi-detached houses or apartments.

31% of the privately owned residential property is owned outright, while 34.5% is owned through a mortgage. 30.9% of housing is being rented out, with a median rent of around $335 per week. For Australians paying a mortgage, the median repayments are approximate $1755 per month. The majority of Australians paying mortgage or rent are using less than 30% of their income for those reasons.

While other expense information has not yet been released, we know that the majority of households in Australia own at least one car and around 83.2% of Australians are accessing the internet through their house.

If you want to access the official data, you can visit the website for the Australian Bureau of Statistics here: http://www.censusdata.abs.gov.au/census_services/getproduct/census/2016/quickstat/036?opendocument

For an interesting visual representation of some of the data released, take a look at this article:

http://www.abc.net.au/news/2017-06-27/census-australia-as-100-people/8634318

10 parenting tips you should know Posted on: June 24, 2017

Summary:

​Parents make mistakes. There isn’t a parent in the world that has raised their child from birth to adulthood perfectly. While this is true, there certainly are things that every parent should know when it comes to raising a child to make it the most enjoyable experience it can be for them and their child.

A healthy childhood involves a strong relationship between parent and child, and there should always be a focus on maintaining this connection. As with any relationship, it is vital that you consider the perspective of the other person, and this is especially true with children.

Often, when a child misbehaves or says something offensive or wrong, there are likely emotions they are not used to behind their actions. It is your job as a parent to help them come to terms with these emotions, to make them realise it’s ok to open up and to justify your actions.

In a Nutshell:

  • ​Good parenting begins with focusing on the relationship between you and your child. As with any relationship, try to put yourself in their shoes when problems arise.
  • Children have to deal with confusing emotions and feelings as they grow up, so don't assume that you or they completely understand what they're going through.
  • Let your child have fun and be passionate about certain things, it's what drives us to achieve our goals and focus on work as adults.

Read On: Top 10 parenting tips, by Gina Shaw:

Parenting advice changes so often that it's easy to feel like you're doing it wrong no matter what.

But Laura Markham, PhD, author of Peaceful Parent, Happy Kids, has her own tips that have nothing to do with choosing between grounding and the time-out chair. Instead, they're all about your relationship with your child.

1. Connect.

Set aside "10 minutes of special time with you every day for each child. Call it 'Hannah time' or 'Ethan time,' so they know it's all about them. One day, they pick what to do. The next day, you pick. But focus all your attention on your child, with all your heart.

“Make sure any siblings are occupied elsewhere -- and put your phone away! Ninety percent of your interactions with your child should be about connecting so she can accept the 10% about correcting."

2. Control your own emotions first.

"No matter what the issue -- bad grades at school, temper tantrums, refusal to eat dinner -- before you intervene with your child, always start by calming yourself. Most of the time, an issue with your child may feel like an emergency, but it isn't. You can take a deep breath and step away in order to calm yourself and be the parent you want to be.”

3. Reconnect when you set limits.

"Don't yell, 'Clean up your Legos, it's time for bed,' from the kitchen. Go to where he is, get down on his level, and take a look at what he's doing. We're always rushing kids through the schedule. Take a minute to sit down and admire what he's made -- then talk about bedtime. If you set your limit with empathy, he's more likely to cooperate."

4. Don't shut down the conversation.

"If your child says, 'I hate math! I'm never going to school again!' he's probably not just being difficult. Heightened emotions mean something's going on. If you just say, 'Of course you're going to school, now do your homework,' you've closed the door on finding out what he's really feeling.

“Instead, open the door by saying something like, 'It sounds like you really don't like math. Can you tell me about it?' That helps the child feel safe opening up to you."

5. Welcome tears.

"Part of your job as a parent is helping your child manage his or her emotions, and sometimes we all need to cry. Parents think that when kids cry you have to quickly calm them down, but it's the opposite. Teach them that those big emotions, like hurt and anger, aren't dangerous. If you see your child getting cranky or aggressive, take a minute to acknowledge your own irritation (see tip No. 2) and then shift to compassion and empathy.

“Your job is to help your child feel safe enough to express the big, scary feelings -- and yes, even let him have a meltdown in the safety of your arms. If he can't articulate them, you can help him show you by setting kind limits, saying something like 'Oh sweetie, I see you're upset. I'm sorry this is so hard.'"

6. Take lots of time for laughter.

"Kids need belly laughs. Set aside time for roughhousing and goofiness. Laughter helps kids feel safe, and helps them transition when they have to leave you for school or a babysitter, because they feel connected.

“But I don't recommend tickling to get kids laughing. … It doesn't accomplish the goal of release, and it can make kids feel out of control."

7. Avoid power struggles.

"We are told as parents that we're supposed to be in charge, and children are supposed to do what we say. But no one wins a power struggle, so don't get stuck on showing who's boss.

“For example, if your child always resists dinner, think about the real needs involved. If she says she's not hungry now but then she's hungry later, maybe she means it. Is it the end of the world if she eats her dinner while you read her bedtime story?"

8. Don't take it personally.

"If your child is upset and lashes out, it's usually not about you. Don't attack back. If your child is rude to you, I would try responding, 'Ouch! We don't speak to each other that way. You must be very upset to talk to me like that.' That opens the door for talking instead of escalating."

9. Help your child learn self-discipline.

"Self-discipline is giving up something you want for something you want more. That's essential as a child grows up. If they want to get good at something, they have to learn to manage themselves through the hard spots. If his train tracks won't fit together or her puzzle is too hard, empathize with the frustration and encourage your child to work through the problem."

10. Never interrupt a playing child.

"OK, you can't always follow that rule. But play is a child's work. If they love doing something so much that they lose themselves in it, that's the kind of passion and flow they'll need to be successful in whatever they do as an adult."

Credits:

Gina Shaw

Writer for WebMD

www.webmd.com

How to teach your kids about money Posted on: June 23, 2017

Having a good understanding of finance and money is important for every adult since it plays such an integral part in everybody’s lives. Therefore, it is never too early to start teaching your children about money and giving them a proper foundation to grow their knowledge about finance. This article will explore the different financial topics you should teach your child as they grow up.

While it is important to start teaching your child at an early age, you probably won’t be able to turn them into self-managed super fund specialist at the age of 1. It is important that you realise a child’s ability to understand certain concepts changes as they grow older; therefore you should start by teaching them simpler topics such as physical money before moving onto topics such as taxes and wages.

CASH OR CARD?

It might seem like a good idea to begin by teaching your child about ‘invisible’ money; however, this is often a difficult concept to gain an understanding at a very young age. Start by discussing the value of physical money.

Explain, through example, how cash can be exchanged for goods and services and how it can also be saved for later purchases. By teaching them about the difference between spending money and saving money, it will be easier to discuss how banks and bank accounts work.

THE FIRST BANK ACCOUNT

Once you think your child has a basic understanding of the use of money and how it can be spent or save, it’s time to open up their first account through a bank.

Most schools have some form of banking program in which children can deposit cash now and then, therefore it should be relatively easy to introduce your child to the idea of a bank account.

POCKET MONEY

Give your child an allowance means they get to be in control of their own money for the first time, and it is an importance milestone for any child. There is no ‘correct’ time to start giving your child pocket money, and it is up to the family to decide when it is best for the child to receive it.

It is also up to the parents and family to decide how much money they will give their children. Some parents only give their children a fixed amount per week depending on their age, while other parents may give pocket money depending on the chores they did during the week.

When you decide to start paying your child pocket money, it’s important to keep payment consistent. With consistency, you will be able to teach your child about budgeting depending on how often they get paid. The frequency of payments can also help with teaching your child about making money last since a child will have to focus on their budget carefully if they are only being paid once a month.

BUDGETING

Being able to create a realistic and practical budget plan is a vital skill when it comes to being financially independent, therefore it’s an important topic to talk about with your child.

When discussing how a budget works and why it’s important, work with your child to create their budgeting plan and help them stick with it. Leading by example can also help with teaching them, so make sure to keep your child around when working with your budget plan. It can also help to teach your child about the expenses that come with being an adult and the importance of setting goals.

SAVING

If you have already given your child the opportunity to have a bank account, you have already introduced them to the idea of saving money. Talk with your child about what they would like to purchase in the future but can’t buy at the moment. Help them create a plan for saving towards the purchase.

You may also create a reward system for you child to teach them about concepts such as interest. For example, you could make it so that every time your child saves $100, you’ll reward them with a trip to the theme park or their favourite dinner.

UNNECESSARY SPENDING

Sometimes we splurge on items or services that we don’t need, and our budget seems to get thrown out of the window. Children make financial mistakes too, and it’s important that you talk with your child when it happens.

Being able to spend wisely is a precious skill to have to have as an adult, therefore make sure you discuss the importance of thinking before buying to your child. Help them understand the pros and cons of certain products when shopping with them or watching television advertisements.

PART TIME WORK

Once your child reaches a certain age, they’ll have the opportunity to look for part-time employment. This is a great chance to give your child full independence when it comes to money and to teach them about concepts such as tax and wages. However, there are some difficulties that come with work at a young age.

Part-time jobs may interfere with school commitments, and it may be difficult to find a suitable job for your child; therefore it’s not entirely necessary to have your child get a job when possible. You will still be able to teach them about tax and wages without job experience, so make sure you consider their feelings.

ADULTHOOD

When your child becomes a fully independent adult, you don’t need to cease helping them completely. At this point, Australian law will govern how you can continue supporting your child financially, so it’s important to understand what you can and can’t do.

Parent-to-child loans, family guarantees and gifts are all ways you can help your child when it comes to finance, so don’t be afraid to lend a helping hand when times get tough. You may also choose to become a co-applicant on your child’s first loan to give them a head start in the property market.

CONCLUSION

Starting early and laying the foundation for your child to grow their financial knowledge is vital for making sure that they make the right financial decisions once they become an adult. By giving them a head start, you are making it much easier for them to grasp complex financial topics and eventually become truly independent.

Are you your own worst enemy when it comes to investing? Posted on: June 22, 2017

Summary:

When it comes to investing, people tend to blame other sources for their problems; however, a surprising number of investors find that they are the cause of their issues. Making decisions based on your emotions can be detrimental to your investment strategy, and often leads to many an investor’s downfall.

It’s important to be sensible when investing, that’s why a short-term investment strategy should not be the focus. A long-term plan involves much less risk and effort, and staying your ground with market volatility can be highly beneficial.

Investors should not put all their eggs in one basket as spreading risk over different investments will prove to be much safer. Finally, research is vital when it comes to investing, and it’s quality over quantity that leads to investment success.

In a Nutshell:

  • Keep emotions away from your investment strategy, as they could lead to mistakes and financial loss.
  • Consider focusing on a long-term investment strategy and hold your ground through market fluctuations in the pursuit of long-term success.
  • Don't focus on one particular investment and diversify correctly with a focus on quality over quantity.

Read On: Investing: Are you your own worst enemy? By MoneyTeam:

Investors can often be their own worst enemies.

They tend to lag behind the equities index due to emotional decision making.

It suggests that investors tend to expect high returns from low-risk investments, follow the herd of other investors (even when their decisions are poor), make narrow-minded decisions, diversify incorrectly, and suffer from mass overconfidence.

These behaviours can lead them to deviate from a good strategy.

To help you get a higher return from your investments, here are four ways to curb negative behaviour.

BE SENSIBLE

Short-term investing can be reckless if you haven’t done your research. Make sure you set clear, realistic long-term investment goals.

REMAIN STRONG

Market volatility can cause investors to behave erratically, especially when media sensationalism becomes a factor. Your focus should be on the long term, so keep investing, regardless of market fluctuations.

DON’T PUT ALL YOUR EGGS IN ONE BASKET

Many investors don’t diversify correctly. Spread your risk properly by investing in multiple asset classes.

QUALITY VERSUS QUANTITY

Avoid being tempted by bargains. Always choose investments with stable management, a strong balance sheet, a history of good dividends and a high return on assets.

Credits:

MoneyTeam

Money Magazine

​www.moneymag.com.au

Debt Downgrading Australian Banks Posted on: June 21, 2017

Summary:

A global ratings agency called ‘Moody’ has downgraded banks in Australia over fears about the housing market. Big banks such as ANZ, CBA, NAB and Westpac were downgraded by one notch, while other banks and institutions were also downgraded.

This action follows after a rival ratings agency had downgraded most Australian banks a month before due to sudden changes in property prices. Moody agreed that while it did not expect any rapid change, it was not willing to ignore the risk that came with high levels of debt.

The company stated that the downgrade was necessary to account for the record amounts of debt in Australia and weak wage growth. It also redefined the economic profile of Australia after concerns over the household sector.

In a Nutshell:

  • Moody, a global ratings agency, has downgraded the major banks of Australia as well as smaller institutions in the wake of the property crisis in Australia.
  • This action was driven by the changes made to the ratings through a rival agency, and Moody is not prepared to ignore the risks.
  • For the ratings agency, the changes were necessary to account for this risk, however they believed that rapid change was unlikely.

Read On: Household debt sees Australian banks downgraded again, by Elysse Morgan:

Global ratings agency Moody's has downgraded the big four banks and eight other institutions over fears about the housing market.

Moody's cut ANZ, CBA, NAB and Westpac by one notch from Aa3 to Aa2.

Bendigo and Adelaide Bank and Newcastle Permanent Building Society went from A3 to A2 while Heritage Bank, Members Equity, QT Mutual, Teachers Mutual, Victoria Teachers Mutual and Credit Union went from A3 to Baa1.

Moody's action comes a month after rival agency S&P Global downgraded almost all Australian banks over fears of "a sharp correction in property prices".

Moody's said while it did not expect a sharp downturn in housing as its key scenario, it could not ignore the risk that high levels of debt and the rapid credit expansion could pose down the track.

"Whilst mortgage affordability for most borrowers remains good at current interest rates, the reduction in the savings rate, the rise in household leverage and the rising prevalence of interest-only and investment loans are all indicators of rising risks," the Moody's statement said.

The agency worries that while Australians have been taking on record amounts of debt, wages have not increased, while underemployment has.

It also did not like "the rising prevalence of interest-only and investment loans" which it believed were indicators of rising risks.

Banks are carrying an arsenal of cash, as required now by regulators, in preparedness for any downturn in the economy or problems in the housing market but Moody's indicates it is not sure whether it will be enough.

"The resilience of household balance sheets and, consequently, bank portfolios to a serious economic downturn has not been tested at these levels of private-sector indebtedness," it said.

Moody's has also rerated Australia's economic profile from "very strong" to "strong", driven by concerns over the household sector, and the country's debt-to-GDP level was also a factor.

Credits:

Elysse Morgan

Business and Finance reporter at ABC

www.abc.net.au

How to properly teach your kids about money Posted on: June 18, 2017

Summary:

By teaching your child to develop good financial skills at a young age, you can build a solid foundation for them to gain a better understanding of the financial skills needed during adulthood. Basic skills can go a long way when it comes to managing your finances, therefore it is important to talk to your children about said basic skills.

With technology advancing, children today no longer witness the use of actual notes and coins. It is important to discuss ‘invisible money’ with your kids, helping with their understanding of how banks and cards work.

Many of the activities you do on a day-to-day basis which involve your financial skills can be opportunities for you to teach your children. Explaining how banks and ATMs work as you are withdrawing money, talking about the importance of sales and deals at a cashier, discussing the importance of budgeting while paying bills, these are just a few opportunities for you to utilise when teaching your children about important financial skills

.An effective plan is vital if you hope to instil financial smarts in your children.

In a Nutshell:

  • By giving your children important financial skills at a young age, you are creating a strong foundation for them to grow when it comes to dealing with the financial hurdles facing young adults.
  • Different financial skills can be taught when the topic arises, and you don't need to conform to a strict criteria when working with your children.
  • Since their ability to understand certain concepts changes over time, you should also change your approach and subject matter when talking about finances to your child at a certain age.

Read On: Teaching kids about money, by Money Smart:

WHY TEACHING FINANCIAL SKILLS IS IMPORTANT

If kids develop good financial skills from an early age they'll be ready for the financial challenges of adulthood.

Giving your kids a good foundation and teaching them about money matters is critical for their personal development. Showing children the basics such as how to budget, spend and save will establish good money habits for life.

INVISIBLE MONEY

In a time of credit cards, internet banking and online shopping, children don't often see people buying products with physical money like notes and coins.

Not seeing money exchanged for purchases makes it harder for kids to get their heads around what things cost. They might see this invisible money as an abstract and unlimited resource rather than real money coming in and out of their family's bank accounts.

Talk to your kids about money often to help them make this invisible money real.

WHEN SHOULD YOU TALK TO YOUR KIDS ABOUT MONEY?

Teaching younger kids the value of money through real life situations and examples will help them understand where money comes from and how it is earned. Here are a few examples of how you could approach this with your kids.

The ATM is a great place to start teaching kids about money. You could explain to your child that the ATM holds the money you have made by working hard and saving. It is not just a hole in the wall where money comes out.

When you take money out of the ATM it is taken from your bank account and you'll have less in your account to spend later.

At the supermarket

When buying items at the supermarket, you can explain to your kids how items are priced and that you can get cheaper or more expensive versions of the same product. This is also an opportunity to discuss how you can shop around for the best price.

You could get them to compare prices for you and pick the cheapest one. If they want a particular brand then explain the price difference to them.

Paying bills

If you receive bills in the mail or online, this can be an opportunity to explain that electricity or your internet connection costs money. You could explain that to pay a $150 power bill it took you so many days at work to earn the money. This will help create a connection between time spent at work and money, as well as the fact that electricity and the internet cost your family money. It might also make them think twice about leaving lights and appliances on.

Doing a budget

Involving your kids in discussions about your family budget is another way you can talk to your children about money. This helps give them the big picture about costs and spending.

By explaining how much money your family has to spend every week and how this money is spent your kids will better understand the costs of family life and how much can be saved for other things.

WHICH MONEY CONCEPTS TO TEACH AT DIFFERENT AGES

As your children grow up, they will have different experiences and require a better understanding of money. Here are some ideas about the sorts of things your children will need to know at different ages.

Younger children (Preschool age)

· You need money to buy things

· Money includes notes and coins that have different values

· You earn money by going to work

· There is a difference between things you need and things you want

School age children (Primary school)

· Comparing prices and shopping around before you buy something is a good habit to get into

· Be careful when shopping online and never share your personal information online

· You need to be patient when saving up and you can make choices about how to spend your money

· Practice the experience online

· Needs and wants

Teenagers (High School)

· It is better to use cash than credit

· Credit is money that you borrow and have to pay back with interest

· It is good to have savings in case of a money emergency

· If you work a part-time job, you need to check your pay slip to see that you are being paid the correct amount and if you are paying tax

· Keep track of mobile phone data and expenses to make sure you don't run out of credit or get stuck with a large bill

· Bank accounts can help you to track and keep your money.

· Doing a budget helps you work out how you should spend your money

Credits:

Money Smart

ASIC

www.moneysmart.gov.au

Act on your super before June 30 Posted on: June 16, 2017

Summary:

The June 30 deadline is fast approaching, and it may be time for you to consider taking advantage of superannuation concessions and benefits made available for this financial year.

This is the last month you will have the opportunity to contribute after-tax savings. If you are under 65, you can use the bring-forward rule to contribute savings of up to $540,000 before July 1. If you do make a large contribution before June 30, make sure to understand how to manage the downside risk of investment markets.

If you are over 50, up to $35,000 can be contributed to super as a tax-deductible contribution, with $30,000 available for those under the age of 50. Although there will be tax made on this contribution, the tax reduction will result in savings.

Couples can maximise their ability to reduce their tax through the smart use of benefits and concessions offered before June 30.

In a Nutshell:

  • This is the last month you can contribute after-tax savings of up to $540,000
  • If you are over 50, you can have $35,000 contributed to super as a tax-deductible contribution, $30,000 for under 50s.
  • Couples can use these techniques to maximise their ability to reduce tax and create a relatively tax-free retirement.

Read On: Act on super before June 30, by Nerida Cole:

With the June 30 deadline fast approaching, there’s not a lot of time to take advantage of the superannuation concessions and benefits available this financial year.

To help turbocharge your savings before the rules change, here are the top three things to put on your EOFY to-do list.

MAXIMISE NON-CONCESSIONAL CONTRIBUTIONS – TAX SAVINGS UP TO $500,000 OVER 20 YEARS

This month is the last opportunity to contribute after-tax savings of up to $180,000 or, if you are under 65 and can use the bring-forward rule, up to $540,000. From July 1 the limit drops to $100,000pa (or up to $300,000 using the bring-forward rule).

Taking advantage of the current generous limits can be highly valuable. Take this example of what tax savings accumulate on $500,000 invested in super versus a higher-tax environment.

Actual earnings will impact on the final benefits, but assuming a moderate return of 3% above inflation each year, the accumulated tax savings over 10 years compared with investing in the top marginal tax rate of 49% is $90,000.

Over 20 years, with an assumed higher return of 5%pa, the accumulated tax savings compared with investing in the top marginal tax bracket could jump up to $500,000.

If you are making a large contribution before June 30, make sure you think about managing the downside risk of investment markets. This can be done by allocating new contributions to cash and then gradually moving the money into your preferred investment approach.

MAXIMISE CONCESSIONAL CONTRIBUTIONS – TAX SAVINGS OF UP TO $11,900

This financial year up to $35,000 can be contributed to super as a tax-deductible contribution if you’re 50-plus, with $30,000 available to under 50s.

Although the super fund will pay 15% tax on this contribution, the resulting tax deduction allows an overall tax saving of up to $11,900 for investors or self-employed workers in the top marginal tax bracket of 49%.

WORKING TOGETHER WITH SUPER CAN HELP COUPLES KEEP THINGS SQUARE AND MAXIMISE TAX-FREE LIMITS

If couples maximise the rules by keeping each super account even, together they could hold $3.2 million tax free at retirement.

Before June 30 is a great time to look at what benefits and concessions may help grow your super as a couple, as apart from the annual benefits this also helps at retirement.

Options include:

  • Make a non-concessional contribution to your spouse’s account to even up balances.
  • Check how much income has been received to determine if the $3000 spouse contribution will provide up to $540 in tax offsets, or if aiming for the government co-contribution payment of up to $500 is a better fit.
  • If cash flow is tight, set up spouse contribution splitting to occur immediately after the end of the financial year may be worthwhile.

Overall, if you can meet the eligibility criteria, those who can maximise concessions before June 30 will get more bang for their buck.

As super is locked away until retirement, check cash flow and debt levels before contributing

Credits:

Nerida Cole

Money Magazine

www.moneymag.com.au

Australian Taxation Office using updated technology to sniff out questionable claims. Posted on: June 13, 2017

Summary:

Tax agent-prepared returns will receive much more attention from the ATO as it utilises updated technology ibn order to spot dodgy deductions. The ATO has warned people about avoiding incorrect claims for work-related expenses, and then new technology coincides with this.

The new technology in use will help with real-time monitoring, allowing for identification of higher-than-expected claims related to a variety of services. By comparing people of similar occupations and salaries, it will help to track questionable claims. With this technology in use, people will need to have a better understanding of the deductions they can and can’t make.

While the ATO believes that this is a step forward, some believe that the introduction of this new technology may turn out to be intimidating and misleading in some cases. While the technology may help to spot unnecessary deductions, it may also flag legitimate claims in certain situations.

In a Nutshell:

  • New software and technology within the ATO will help to identify questionable claims made for work-related expenses.
  • Real-time monitoring will compare people of similar occupation and salary in order to spot any out-of-place claims.
  • While it may help to find questionable claims, it may also intimidate those with legitimate claims when mistakes arise.

Read On: Australian Taxation Office sharpens its focus on work-related deductions, by Anthony Keane:

TAX agent-prepared returns will receive fresh attention from the Australian Taxation Office this year as it expands its technology to spot dodgy deductions.

The move coincides with a new warning from the ATO for people to avoid incorrect claims for work-related expenses.

Last year the Australian Taxation Office introduced real-time monitoring of about 3.2 million online tax returns, with messages about questionable claims being sent to individuals as they prepared their returns.

More than 100,000 people received messages and many changed their deductions.

ATO assistant commissioner Kath Anderson says the tax technology compares people with their peers.

This year its warning system will be expanded to tax agents who lodge more than nine million returns annually, informing them if clients have previously made unusual claims.

Assistant commissioner Kath Anderson said the real-time monitoring would identify higher-than-expected claims related to motor vehicles, travel, phone, internet and self-education.

“It’s not designed to catch people out. It’s designed on the basis that we think most people will do the right thing,” she said.

“It compares people to their peers — people in similar occupations earning similar amounts of money. It’s quite sophisticated.”

Ms Anderson said the technology would also notice types of income that was declared in previous years and not declared this year.

“We think that’s especially important for people who are lodging early, because they tend to miss some income,” she said.

“Many taxpayers don’t have a good understanding of what deductions they can claim, and believe they can claim for items which they in fact can’t.

More than nine million Australians use a tax agent to lodge their annual return.

“There are some areas where we think people need help but we focus more on the claim type rather than particular occupations.”

H & R Block director of tax communications Mark Chapman said workers who tried to put in wrong claims were likely to be spotted.

In previous years the ATO would announce it was keeping an extra-close eye on certain occupations at tax time, but now it can scan millions of electronic transactions and claims made by all workers.

“Aren’t we lucky — they’re targeting all of us,” Mr Chapman said.

“They have access to so many different sources of data these days and are sophisticated in the way they can benchmark people against other people.

“The chances of putting in large inaccurate claims these days are quite small.”

Mr Chapman said the new messaging system was unnecessary for tax agents who were doing their job correctly, and could scare some individuals into not claiming everything they were entitled to.

“I think a lot of people find these messages intimidating,” he said.

“I have no doubt a lot of people did change their return after receiving a message (last year) but I’m not sure how many needed to change it.”

TAX DEDUCTION MYTHS

What the ATO says you probably can’t claim:

• Trips between home and work - unless carrying bulky work-related goods

• Car expenses that have been salary sacrificed

• Meal expenses for travel unless you were required to work away from home overnight

• Private travel or private transport of bulky goods or equipment

• Everyday clothes to wear to work — such as a suit or black pants — even if your employer requires you to wear them

• Deductions for cleaning eligible work clothes without showing how you calculated the cost

• Higher education contributions charged through the HELP scheme

• Self-education expenses if the study is not connected with your current job

• Private use of phone or internet

• Upfront deductions for tools and equipment costing more than $300 each. These must be depreciated over time.

Credits:

Anthony Keane

Personal Finance Writer at News Corp

www.news.com.au

RBA Board Meeting Decision June Posted on: June 8, 2017

Summary:

The board at the RBA has decided to leave the cash rate unchanged at 1.50 per cent.Growth is expected in many advanced economies around the world; however, there are still uncertainties. The Chinese economy has been growing, supported by spending on infrastructure and construction of property. In the world, inflation rates have moved higher over the past year, reflecting higher commodity prices. Core inflation is low, and interest rates in the U.S. are expected to increase. Overall, financial markets have been functioning effectively.

Commodity prices are higher than they were a year ago, which has provided a boost to the national income of Australia. Business conditions have improved, and business investment has picked up amidst the decline in mining investment. Employment growth has been stronger in the past months; however, hours worked remain weak. Wage growth has remained low and is likely to continue as such.

Conditions in the property market have varied considerably around the country. Eastern capital cities will see an additional supply of apartments and rent will increase at its slowest for over two decades.

With this information, the board has decided that the best course of action is to keep the cash rate unchanged at 1.50 per cent.

In a Nutshell:

  • Economies around the world are expected to see growth, with inflation rates having moved higher over the past year.
  • Commodity prices are higher than they were before, increasing the national income of Australia. Business conditions have imrpvoed and investment has picked up.
  • The property market varies considerably around the country, with an increase in the supply of apartments helping to slow the increase in rent.

Read On: Statement by Philip Lowe, Governor: Monetary Policy Decision:

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The broad-based pick-up in the global economy is continuing. Labour markets have tightened further in many countries and forecasts for global growth have been revised up since last year. Above-trend growth is expected in a number of advanced economies, although uncertainties remain. In China, growth is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. Commodity prices are generally higher than they were a year ago, providing a boost to Australia's national income. The prices of iron ore and coal, however, have declined over recent months as expected, unwinding some of the earlier increases.

Headline inflation rates in most countries have moved higher over the past year, partly reflecting the higher commodity prices. Core inflation remains low, as do long-term bond yields. Further increases in US interest rates are expected over the year ahead and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively.

Domestically, the transition to lower levels of mining investment following the mining investment boom is almost complete. Business conditions have improved and capacity utilisation has increased. Business investment has picked up in those parts of the country not directly affected by the decline in mining investment. Year-ended GDP growth is expected to have slowed in the March quarter, reflecting the quarter-to-quarter variation in the growth figures. Looking forward, economic growth is still expected to increase gradually over the next couple of years to a little above 3 per cent.

Indicators of the labour market remain mixed. Employment growth has been stronger over recent months, although growth in total hours worked remains weak. The various forward-looking indicators point to continued growth in employment over the period ahead. Wage growth remains low and this is likely to continue for a while yet. Inflation is expected to increase gradually as the economy strengthens. Slow growth in real wages is restraining growth in household consumption.

The outlook continues to be supported by the low level of interest rates. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.

Conditions in the housing market vary considerably around the country. Prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades. Growth in housing debt has outpaced the slow growth in household incomes. The recent supervisory measures should help address the risks associated with high and rising levels of indebtedness. Lenders have also announced increases in mortgage rates, particularly those paid by investors and on interest-only loans.

Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

Credits:

Philip Lowe

Governor of the RBA

www.rba.gov.au

Superannuation Year End Planning For The 2016/17 Financial Year Posted on: May 26, 2017

The end of the financial year always seems to crop up faster than it should. Given the impending July 2017 superannuation changes, being on top of your end of financial year planning is as important as it has ever been.

This year it is essential that you consider maximising the existing contribution limits for superannuation before they decrease on 1 July 2017. While maximising contributions should be front of mind it is imperative you don’t forget your other obligations as trustee of your SMSF and ensure that your SMSF stays on track!

Decreased concessional contributions cap

For anyone who was under 49 years of age on 30 June 2016 the maximum amount of concessional (tax deductible) contributions that can be made to superannuation without penalty is $30,000. However, for anyone who is at least 49 years of age or older on 30 June 2016 the maximum amount is $35,000. This includes amounts your employer may make as compulsory super and salary sacrifice contributions as well as any personal deductible contributions you may have made if you qualify.

From 1 July 2017, this cap will fall to $25,000 for everyone, so ensure any reserving and salary sacrifice strategies are appropriate. If you wish to maximise your contributions before June 30 make sure you talk to your professional advisor so that your salary sacrifice agreement with your employer allows the maximum to be salary sacrificed. Also ensure that all contributions are deposited with enough time so they are received by your fund before Friday 30 June 2017.

If you are older than 65 you will need to meet a work test to contribute to super in most cases. You need to work for at least 40 hours during 30 consecutive days at any time during this financial year to make tax deductible and non-deductible contributions to super.

Claiming a tax deduction for personal superannuation contributions

If you are self-employed, an investor or in receipt of a pension and receive less than 10% of your income, fringe benefits and other related payments as an employee you may be eligible for a tax deduction for personal contributions to superannuation. If you intend to claim a tax deduction make sure you are eligible to claim a deduction and seek advice if you are unsure. You need to notify your fund of the amount you wish to claim as a deduction before the end of the next financial year, that is, before 30 June 2017. Make sure you keep all relevant paperwork to save stress when the time comes to see your SMSF advisor.

From 1 July 2017, everyone who is eligible to make a contribution will be able to claim a tax deduction for personal superannuation contributions without needing to satisfy the 10% rule.

Making after tax contributions to super

You can make after tax contributions to super which could come from your personal savings, transferring personal investments, an inheritance or from the sale of investments. This financial year the maximum personal after tax contribution is $180,000, however, if you are under 65 years of age you can contribute up to $540,000 over a fixed three year period. This allows you to make substantial contributions to super and build up your retirement savings. The way it works is that if you are under 65 and make total after tax contributions of more than $180,000 in a financial year the bring forward rule is triggered. This allows you to make non-deductible contributions of up to $540,000 in total over a fixed three year period commencing in the year in which you contributed more than $180,000.

From 1 July 2017, this cap will fall to $100,000 per annum with a $300,000 fixed year bring forward. This also means if you triggered the bring forward rule before 2016/17 but the full $540,000 was not contributed, you will be limited to a transitional bring forward cap.

Those with a total superannuation balance of $1.6 million or more will not be able to make after tax contributions past 1 July 2017.

Beware of excess contributions tax

Anyone making large superannuation contributions should exercise extreme care for any type of contributions to avoid excess contributions penalties. This can apply to any tax deductible and non-tax deductible contributions made to super. Making sure you do not exceed the contribution caps will save you both the money and time of dealing with excess contributions tax.

Drawing superannuation pensions

If you are in pension phase make sure the minimum pension has been paid to you for this financial year. If you do not take your minimum pension, the pension account is to cease and the assets that supporting this pension are deemed to not be in retirement phase for the whole year meaning your fund will lose its tax exemption on earnings!

Drawing superannuation lump sums

Once you reach 60 years of age all lump sums from superannuation are tax free. However, before age 60 any lump sums that include a taxable component can be taxable. The taxable component includes the tax deductible contributions plus any income that has accumulated on your superannuation benefit. No tax currently is payable on taxable amounts of up to $195,000, in total, you receive prior to age 60.

If you are eligible to draw amounts from superannuation you may like to defer receiving the amount until after reaching the age of 60 or until a later financial year when you may end up paying a lower rate of tax.

SMSF fund expenses

For SMSF members in the accumulation phase, tax deductions for expenses are usually not significant, but it’s important to ensure expenses are actually incurred or paid before 30 June to be deductible in the current financial year.

Preparing for the $1.6 million transfer balance cap and capital gains tax (CGT) relief

Be aware of the new $1.6 million transfer balance cap that will limit the amount you can keep in the pension phase of superannuation from 1 July 2017. This new cap will limit the assets you can have supporting superannuation pensions to $1.6 million.

You should make sure that as of 1 July 2017 you only have $1.6 million in pension phase. This may require you to roll some assets currently supporting a pension back to accumulation phase where their earnings are taxed at 15 per cent. You may be eligible for CGT relief on assets affected by the new rules.

It is essential that your plan to comply with the transfer balance cap and all relevant documentation is formulated by 30 June 2017. Minutes should be created detailing the fund members’ intent to transfer assets out of retirement phase to avoid breaching the new transfer balance cap. Minutes documenting how CGT relief is intended to be undertaken should also be produced.

Rebalancing accounts between spouses

The end of financial year is also the perfect opportunity to rebalance pension accounts between spouses before the new superannuation rules take effect on 1 July 2017. As long as you have available contribution space and are eligible to withdraw, rebalancing will ensure that super balances are as even as possible and the $1.6 million transfer balance cap is maximised per member.

Transition to retirement income streams losing their tax-exempt earnings status

From 1 July 2017, superannuation fund members will lose the tax-exempt treatment of earnings on assets that support a transition to retirement pension (TTR). Members will still be able to start new or maintain existing TTRs, but they should be reviewed before 30 June in accordance with their SMSF’s objective.

How can we help?

If you have any questions, require assistance or would like further clarification with any aspect of your end of year superannuation tax planning, please feel free to give us a call on 1300 118 618 so that we can help you with your financial goals.